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Manhattan Q3 2014 Effective Rent Report

29 October 2014

CompStak's Q3 2014 Effective Rent Report for Manhattan finds that the number of top tier Midtown transactions decreased this quarter. Vibrant class A leasing activity in Midtown South held Manhattan average effective rent at $56.70 PSF, virtually the same as last quarter. The class B sector recorded strong performance this quarter following four consecutive quarters of growth. Average class B effective rents have increased over 10% compared to Q3 of last year.

Midtown and Downtoan Class A Slow, Class B Trending Up

Fewer high end Midtown class A transactions this quarter

An increase in Midtown class B leasing activity

Downtown: disparity between WTC Effective Rents in the low $50s and the Financial District's mid $30s

Spotlight: Midtown South Getting Pricey

Midtown South leasing has shown the largest rental growth of any Manhattan market over the past few years. The 19% growth in effective rent since the Q3 of last year can be explained by a combination of factors including pricey expansions in Chelsea, an ongoing demand for creative space, and the opening of new high-end buildings, enticing tenants to pay upwards of $100 PSF in starting rent. Area wise, Midtown South leases now account for 26% of the priciest office leases in Q3.